Morotock Ins. Co v. Rodefer

• Decision Date: 02 April 1896
• Citation: 24 S.E. 393,92 Va. 747
• Parties: MOROTOCK INS. CO. v. RODEFER et al.
• Court: Virginia Supreme Court

24 S.E. 393

92 Va. 747

MOROTOCK INS. CO.

v.RODEFER et al.

Supreme Court of Appeals of Virginia.

April 2, 1896.

Insurance — Failure to Disclose Mortgage — Chattels or Fixtures.

1. A fire policy is not vitiated by the presence of a mortgage on the property and failure of insured to voluntarily disclose that fact, the policy having been issued without any inquiries or representations having been made, though the policy provides that it shall be void "if the assured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof, or if the interest of the insured in the property be not truly stated therein."

2. The "interest" of insured in the property is "unconditional and sole ownership, " within the condition of the policy, though he has mortgaged the property.

3. A mortgage on a glass plant, embracing several tracts of land and including, also, "all engines, machinery, tools, appliances, connections, attachments, and contrivances of every kind now used in operating the glass factory on said premises, " will not defeat recovery, under the provision of a fire policy thereon, that the policy should be void "if the subject of insurance be * * * incumbered by a chattel mortgage, " without proof by the insurer that the articles enumerated are not fixtures, but retain their character of personalty.

4. The provision in a policy, that it shall be void "if any change, other than by death of insured, take place in the interest, title, or possession of the subject of insurance, " has reference only to a change subsequent to the time the insurance is effected.

Error to corporation court of Danville.

Action by Rodefer Bros, against the Morotock Insurance Company. Judgment for plaintiffs. Defendant brings error. Affirmed.

Green & Miller, for plaintiff in error.

Berkeley & Harrison, for defendants in error.

RIELY, J. The policy sued on in this case was issued on October 31, 1891, and contains, among other provisions, the following: "This entire policy shall be void if the assured has concealed or misrepresented, in writing or otherwise, any material fact or circumstanceconcerning this insurance or the subject thereof, or if the interest of the insured in the property be not truly stated herein, * * * or if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple, or if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage, * * * or if any change, other than by death of an insured, take place in the interest, title, or possession of the subject of insurance, * * * whether by legal process or judgment, or voluntary act of insured, or otherwise." The subject of the insurance was the glass works of the insured, with all the apparatus for manufacturing glass, the machinery, fixtures, stock, and personal property. Prior to the issue of the policy, on October 3, 1891, the insured had executed a mortgage upon their glass plant, embracing three parcels of land, and including, also, "all engines, machinery, tools, appliances, connections, attachments, and contrivances of every kind now used in operating the glass factory on said premises. * * *" The insurance was effected through an insurance broker, and the policy was issued without the usual printed or written application by or in behalf of the insured. No representation whatever was made by them, nor was any statement made by or required of them as to their title or interest in the property or as to the existence of any incumbrance thereon. There is no evidence of a fraudulent concealment of any matter, and it is not pretended that there was any.

The first contention on the part of the plaintiff in error is that it was the duty of the insured voluntarily to disclose to the company the existence of the mortgage, and that failure to do so rendered the policy void. Applicants for insurance are not generally aware of the necessity of disclosures which long experience in the business of insurance has shown to underwriters to be necessary, or what disclosures it is important to make; while insurance companies can not only protect themselves by making inquiries in regard to such things as they may regard to be material, but, as is well known, are in the habit of doing so. And such was the custom of this company. It was admitted, on the trial, by its general agent, that the company had blank forms of application for insurance which contained this question concerning the property to be insured, "If incumbered, to what amount?" but that such application was not sent in this instance to the insured, or to the broker through whom the insurance was effected, to obtain an answer to the foregoing or any other question. There is nothing in the policy which required a disclosure by the insured of the liens on the property, except the disclosure of any chattel mortgage where personal property was the subject of insurance; and if the company neglected to make the proper inquiry, it cannot now be permitted, after a loss has happened, to defeat a recovery because the insured did not voluntarily disclose the existence of the said mortgage. If an insurance company elects to issue Us policy without an application, or any representation in regard to the title to the property upon which the insurance is effected, the company cannot complain, after a loss has ensued,...